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KEY POINTS: Adaptation to hypoxia makes the heart more oxygen efficient, by metabolising more glucose. In contrast, type 2 diabetes makes the heart metabolise more fatty acids. Diabetes increases the chances of the heart being exposed to hypoxia, but whether the diabetic heart can adapt and respond is unknown. In this study we show that diabetic hearts retain the ability to adapt their metabolism in response to hypoxia, with functional hypoxia signalling pathways. However, the hypoxia-induced changes in metabolism are additive to abnormal baseline metabolism, resulting in hypoxic diabetic hearts metabolising more fat and less glucose than controls. This stops the diabetic heart being able to recover its function when stressed. These results demonstrate that the diabetic heart retains metabolic flexibility to adapt to hypoxia, but is hindered by the baseline effects of the disease. This increases our understanding of how the diabetic heart is affected by hypoxia-associated complications of the disease. ABSTRACT: Hypoxia activates the hypoxia-inducible factor (HIF), promoting glycolysis and suppressing mitochondrial respiration. In the type 2 diabetic heart, glycolysis is suppressed whereas fatty acid metabolism is promoted. The diabetic heart experiences chronic hypoxia as a consequence of increased obstructive sleep apnoea and cardiovascular disease. Given the opposing metabolic effects of hypoxia and diabetes, we questioned whether diabetes affects cardiac metabolic adaptation to hypoxia. Control and type 2 diabetic rats were housed for 3 weeks in normoxia or 11% oxygen. Metabolism and function were measured in the isolated perfused heart using radiolabelled substrates. Following chronic hypoxia, both control and diabetic hearts upregulated glycolysis, lactate efflux and glycogen content and decreased fatty acid oxidation rates, with similar activation of HIF signalling pathways. However, hypoxia-induced changes were superimposed on diabetic hearts that were metabolically abnormal in normoxia, resulting in glycolytic rates 30% lower, and fatty acid oxidation 36% higher, in hypoxic diabetic hearts than hypoxic controls. Peroxisome proliferator-activated receptor α target proteins were suppressed by hypoxia, but activated by diabetes. Mitochondrial respiration in diabetic hearts was divergently activated following hypoxia compared with controls. These differences in metabolism were associated with decreased contractile recovery of the hypoxic diabetic heart following an acute hypoxic insult. In conclusion, type 2 diabetic hearts retain metabolic flexibility to adapt to hypoxia, with normal HIF signalling pathways. However, they are more dependent on oxidative metabolism following hypoxia due to abnormal normoxic metabolism, which was associated with a functional deficit in response to stress.